A combination of high interest rates and surging inflation led to lower distributable income that, in turn, caused distribution per unit (DPU) to come under pressure.
With lingering pessimism surrounding REITs, you may wonder if they are still worth buying.
Can income investors continue to rely on this asset class for reliable dividends?
Here are four aspects of REITs that you need to watch for to determine if they should enter your buy watchlist.
Debt metrics
REITs rely on debt financing for running their operations, acquisitions and asset enhancement initiatives (AEIs).
Remember that a REIT never pays off its debt in full but only services the interest expense on its loans.
When these loans come due, they are then refinanced and rolled over at the prevailing interest rate.
Hence, investors should look…
